Record annual profits to be announced by Shell tomorrow should be used towards paying off a bill estimated at more than $20bn (£10bn) for the damage caused by its oil activities to local communities and the wider environment, according to an alliance of human rights and green groups including Friends of the Earth (FoE).

High crude prices mean the Anglo-Dutch oil company is expected to show earnings of $25bn, up 17%. It has left in its wake a legacy of oil spills, air pollution and residents who pay the price of its operations while gaining few of the financial benefits, claims a report today from the FoE-led Shell Accountability Campaign.

Advertisements calling on Shell to "clean up its mess" will appear in the Guardian and the Dutch newspaper De Volkskrant tomorrow. They are signed and financially supported by more than 7,000 people worldwide in an effort to encourage directors to live up to the aims of their corporate social responsibility (CSR) policies. Nnimmo Bassey, from Environmental Rights Action in Nigeria, said: "Despite Shell's public commitment to CSR and specific promise it has made to communities, life on the fenceline can too often be likened to hell. From Nigeria to Ireland, the Philippines to South Africa, Shell still too often fails to respect the environment or the needs of local communities."

Shell's poor environmental record in Nigeria is given prominence in the report which demands the company pay $10bn to clean up oil spills and compensate communities in the Niger Delta. A further $1.5bn should be spent ending gas flaring in the country with a similar amount being paid immediately to the Ijaw community in line with a ruling in the Nigerian high court. Environmental Rights Action, Friends of the Earth and others estimate that as much as 13m barrels of oil have been spilled into the Niger Delta ecosystem over the last 50 years by Shell and its partners, an amount they say is 50 times more than that associated with the infamous Exxon Valdez tanker grounding off Alaska. "The spills pollute the land and water of the communities. Drinking water is affected, people get sick, fish populations die and farmers lose their income because the soil of the land is destroyed," argue the groups who go on to document a series of promises made by Shell to halt flaring of excess gas in Nigeria. Flaring is held responsible for acid rain in the Niger Delta which is said to corrode roofs, pollute lakes and damage vegetation. The company is urged to halt flaring this year by reinjecting the excess gas, processing it into liquefied natural gas or shutting down those facilities where neither is an option.

The bill from all Shell's activities worldwide is difficult to quantify, according to the green group but is likely to be much higher than the $20bn estimate. It also notes that Shell's claimed commitment to renewable energy projects is undermined by the fact that less than 1% of its earnings during the year came from wind or solar.

Hannah Griffiths at FoE said: "Shell is bleeding communities dry and $20bn is just the beginning in quantifying Shell's true environmental damage."

Shell said last night the report's claims "neither reflect the realities of the situation and the very real progress made, nor represent the views of the wider communities around these locations. Shell is committed to being a good neighbour and maintains productive relationships with many local communities and their representatives. For example, pipelines are being replaced at SAPREF (Durban) in South Africa and more than 30% of the flares are out in Nigeria with the remainder to be stopped in 2009."

Backstory

Shell has been operating in the Niger Delta since the 1930s and is by far the largest operator with an output of more than 1m barrels a day. But the 90 oil and gas fields have suffered spills and sabotage, damaging the livelihood of farmers and fishermen and threatening the half-million Ogoni. In 2005 the high court of Nigeria found Shell gas flaring to be a "gross violation" of human rights.

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